Collector of Customs v Wallace Laboratories Pty Ltd [2002] FCA 1340

FEDERAL COURT OF AUSTRALIA

Collector of Customs v Wallace Laboratories Pty Ltd [2002] FCA 1340

CUSTOMS & EXCISE – claim by Collector that the respondent had failed to "account" to satisfaction of Collector under Excise Act 1901 (Cth) s 60 PRACTICE & PROCEDURE – whether open to respondent to plead a defence that in fact there was no shortfall Excise Act 1901 (Cth) s 60 Avon Downs Pty Limited v The Federal Commissioner of Taxation (1949) 78 CLR 353 applied COLLECTOR OF CUSTOMS V WALLACE LABORATORIES PTY LIMITED NO. N 320 OF 2001 BEAUMONT J 22 OCTOBER 2002 SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY N 320 OF 2001

BETWEEN: COLLECTOR OF CUSTOMS

APPLICANT

AND: WALLACE LABORATORIES PTY LIMITED

RESPONDENT

JUDGE: BEAUMONT J

DATE OF ORDER: 22 OCTOBER 2002

WHERE MADE: SYDNEY

THE COURT ORDERS THAT: 1. That paragraph 8 of the amended defence dated 6 August 2002 be struck out. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY N 320 OF 2001

BETWEEN: COLLECTOR OF CUSTOMS

APPLICANT

AND: WALLACE LABORATORIES PTY LIMITED

RESPONDENT

JUDGE: BEAUMONT J

DATE: 22 OCTOBER 2002

PLACE: SYDNEY

REASONS FOR INTERLOCUTORY JUDGMENT (ON DEMURRER TO PAR 8 OF AMENDED DEFENCE DATED 6 AUGUST 2002) BEAUMONT J: 1 These reasons should be read in conjunction with my reasons dated 30 May 2002 and 21 October 2002. 2 Paragraph 8 of the amended defence, dated 6 August 2002, pleads: "8. The Respondent denies that it is indebted for any amount whatsoever to the Commonwealth claimed by the Applicant but otherwise admits paragraph 16 of the Further Amended Statement of Claim and says:- (i) The amount claimed by the Applicant, being equivalent to the amount of Excise duty payable on the alcohol said to be not accounted for to the satisfaction of the Collector is produced by erroneous assertions as to a shortfall. (ii) The Respondent should not in any event suffer judgment for any amount equivalent to the Excise duty payable in respect of any quantity of alcohol which it is able to satisfactorily account for." 3 By his reply dated 9 August 2002, the Collector contends that this plea is bad in law since it provides no argument or defence. The Collector submits that, for the reasons I accepted yesterday in rejecting par 3A of "MFI 9" (see [2002] FCA 1339), par 8 is an impermissible attempt to bypass the legislative scheme. 4 I agree that the plea is bad in law. 5 In my opinion, it invites the Court, impermissibly, to substitute its opinion for that of the Collector holus bolus on the relevant matter. 6 In truth, whilst the Collector's decision is not unexaminable, there are real limits (not mentioned in par 8) upon the scope of judicial review in this kind of context. 7 The position is authoritatively explained by Dixon J in Avon Downs Pty Limited v The Federal Commissioner of Taxation (1949) 78 CLR 353 (at 360): "But it is for the commissioner, not for me, to be satisfied of the state of the voting power at the end of the year of income. His decision, it is true, is not unexaminable. If he does not address himself to the question which the sub-section formulates, if his conclusion is affected by some mistake of law, if he takes some extraneous reason into consideration or excludes from consideration some factor which should affect his determination, on any of these grounds his conclusion is liable to review. Moreover, the fact that he has not made known the reasons why he was not satisfied will not prevent the review of his decision. The conclusion he has reached may, on a full consideration of the material that was before him, be found to be capable of explanation only on the ground of some such misconception. If the result appears to be unreasonable on the supposition that he addressed himself to the right question, correctly applied the rules of law and took into account all the relevant considerations and no irrelevant considerations, then it may be a proper inference that it is a false supposition. It is not necessary that you should be sure of the precise particular in which he has gone wrong. It is enough that you can see that in some way he must have failed in the discharge of his exact function according to law." 8 Accordingly, I hold that par 8 is bad in law and should be struck out. I so order. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Beaumont J.